Enterprise founders putting $25 million toward less-polluting fuels

February 25, 2007

By Rachel Melcer and Christopher Boyce
ST. LOUIS POST-DISPATCH

February 25, 2007

The family that got rich by renting fossil-fuel burning automobiles is donating $25 million for scientific research aimed at reducing this country's dependence on oil and curbing emissions that cause global warming.

The funds from Jack and Susan Taylor will go to establish the Enterprise Rent-A-Car Institute for Renewable Fuels at the Donald Danforth Plant Science Center in Creve Coeur.

The money will pay 30 scientists to eventually unlock the secrets of making fuel from corn stover, switchgrass or some other plentiful plant source that produces less pollution than gasoline.

In the near term, the work of these scientists could result in improvements to the production of corn-based ethanol and biodiesel made from soybeans.

"My father (Jack Taylor) has always had a bit of a bent on the environment. … We want to be part of (the Plant Science Center) and part of the solution" to global warming, Enterprise Rent-A-Car Chief Executive Andrew Taylor said Friday.

Today, the creation of the institute adds credibility to the St. Louis region's goal of becoming a national focal point in biofuels, say business leaders and state officials.

"It's a wonderful opportunity ... to create another strategic asset for the St. Louis region and Missouri as we forge ahead in our mission to secure a spot as the leading place for bioenergy research and economic development to occur," said Mike Mills, the state's deputy director of Economic Development.

The institute "will help us along the way as we try to attract other assets, such as (federal) renewable energy labs," he said.

St. Louis and other regions are in a horse race for funding and projects in renewable fuels. Growing international awareness of global warming, along with the United States' determination to wean itself from foreign oil, are spurring industry and governments into action.

"There are opportunities. People are waking up to the fact that money needs to be spent in this area (and) we are well positioned to respond," said Himadri B. Pakrasi, a professor and director of Washington University's Bioenergy Initiative. He is coordinating a regional bid to become one of two national bioenergy research centers being established by the Energy Department. The agency is expected to announce the centers, which will split a $250 million grant, this fall.

The Taylors' decision to establish a research institute follows on the heels of a similar, but larger effort by BP plc. On Feb. 1, the British oil giant said it is funding a $500 million renewable fuels research program at a consortium made up of the University of California at Berkeley, the University of Illinois at Urbana-Champaign and the Lawrence Berkeley National Laboratory.

'Great start'

Roger Beachy, president of the Plant Science Center, said the Taylors' $25 million gift is a "great start" for the institute, and he expects it will grow with future grants from other sources.

At the outset, the institute will encompass 18 researchers already doing biofuel-related work at the Plant Science Center. A dozen more scientists will be hired over three years.

Work at the institute will dovetail with research at Washington University and at Southern Illinois University at Edwardsville's National Corn-to-Ethanol Research Center. The institute adds to local biofuel assets that include national commodity groups and agribusinesses such as Monsanto Co., Bunge North America and Solae Co. Efforts also are under way to create the Center for Evergreen Energy, a biofuels think tank that would gather and vet research and suggest public policy changes.

The region doesn't have to do much more to earn a national spot in renewable energy, said Pakrasi, the Washington U. professor. "It is already a fact that many people see St. Louis as a place where many of these activities are taking place" and will accelerate.

In establishing the institute, the Taylor family is helping the regional economy, working to meet national energy security and environmental goals, and aiding its own industry, said Richard Fleming, president and CEO of the St. Louis Regional Chamber and Growth Association.

'They're remarkable'

"They're remarkable in terms of what they represent for our community," he said. Enterprise Rent-A-Car "has been a very successful company because they've always thought ahead. And now you can see a future where a company like Enterprise might make biofuels an integral part of their business."

As a company, Enterprise is equally impressed with the local collaboration around energy research, a topic that is central to the company's future, said Andrew Taylor. While he has had many conversations about supporting renewable energy with his father, Jack, the company's retired founder and current chairman, the local effort gave the idea more immediacy.

"I think we might have been less interested" otherwise, Andrew Taylor said. "Maybe it would not have happened this soon, but this is so natural and we want to be a part of this renewable fuel issue."

Jack Taylor and his wife, Susan, made the $25 million endowment on top of $10 million they gave to the Plant Science Center in 2005.

At the time of that initial gift, the elder Taylor began discussing the possibilities of exploring biofuels at the Plant Science Center with his friend and the center's chairman, Dr. William Danforth, said Pat Farrell, Enterprise's vice president of corporate communications. Once it was established that the center could be used for researching more than the future of plants for food, the Taylors realized an important window had opened for the company.

"I was in business in the 1970s when we had the two energy crises," Andrew Taylor said. "I remember the cars with odd-number licence plates getting gas on odd-numbered days. It was not good for our business and not good for our country. We would not like that to happen again."

Taylor acknowledged that critics might interpret the $25 million endowment as an expense of corporate reconciliation from the world's largest buyer of vehicles. Enterprise's international fleet comes in at just under 900,000 vehicles. In October 2006, the company said it will donate $50 million to plant 50 million trees over the next 50 years, in a partnership with the National Arbor Day Foundation.

"This is not spin. This is absolutely something we need to do for our business," Taylor said, while acknowledging his father has been keen to recognize the feel-good, environmental aspect of the donation.

Making strides

Farrell added that, despite withstanding previous energy crises, Enterprise understands that public opinion is starting to question "the acceptable aspects of a vehicle" — primarily fuel consumption.

To respond to those questions in the short-term, Enterprise has made strides in making its current fleet as green as its logo.

Its fleet includes 30,000 flexible-fuel vehicles that can run on fuel that is 85 percent ethanol and 15 percent gasoline. However, the vehicles are grouped mainly in areas of Iowa and Minnesota that have a large number of fueling stations that offer E85 fuel. That means you can't currently rent a flex-fuel car in St. Louis.

Other market conditions also handcuff Enterprise's green efforts. The popularity of hybrids — cars that run on a combination of gasoline and electricity — among consumers has limited Enterprise's ability to buy the vehicles for its fleet. A recent order will raise Enterprise's total number of hybrids to 3,000 by mid-summer.

But as technology evolves, Andrew Taylor believes Enterprise may hold a key position as a pseudo test-marketer of fuel solutions for the auto industry. Enterprise has a high number of customers who rent a car while their own vehicle is being serviced, meaning users would be using the vehicles in their normal driving routines.

"We can demonstrate to the car market that there is commercial application when we bring (biofuels) to the market," Farrell explained.

Enterprise hasn't calculated its carbon footprint — the amount of carbon dioxide its cars contribute to the atmosphere. And Taylor said its motivation is not solely environmental. He believes contributing to advances in biofuels could give the company a competitive advantage.

Supporters call the gesture a fine example of enlightened self-interest.

"There are some in the private sector who want to take a responsible view," said Beachy, the Plant Science Center president. "Here, you have a company that rents cars recognizing what its carbon footprint is and trying to address it.

"I really hope this is part of a wake-up call for industries in general to recognize that they have a role to play in being part of the solution," he said.